VIRTUAL RESTAURANT ACCELERATOR™ LICENSE AGREEMENT
By subscribing to the Virtual Restaurant Accelerator or Two Hens Package (“Accelerator”) you (“Licensee”) are entering into this LICENSE AGREEMENT (“Agreement”) on the subscription date (“Effective Date”) with Virtual Restaurant Consulting LLC, a California limited liability company (“Company”), with reference to the following facts.
A. Company and/or an Affiliate of Company claims ownership in certain proprietary and other property rights and interests in and to the “TWO HENS” “BINGE WATCH” “PRETTY GOOD EATS” ACME RESTAURANTS” names, trademarks, service marks, web domains, social media pages, and such other or substitute trademarks, trade names, service marks, logotypes, insignias, trade dress and designs as Company may from time to time authorize or direct Licensee to use in connection with for use in connection with a Restaurant (collectively, the “Marks”).
B. Among other things, Company licenses Marks for takeout and delivery restaurants that utilize distinctive food recipes, preparation techniques, product specifications, trade secrets and other confidential information, and equipment specifications.
C. Company has the right to license various copyrights and the Marks to use in connection with the development and operation of the Marks branded delivery-only restaurants operated under the System and Standards (each a “Restaurant” and more than one “Restaurants”).
NOW, THEREFORE, the parties agree as follows:
1.1 Certain Definitions. In this Agreement the capitalized terms shall have the meanings defined herin.
2.1 Grant and License.
(a) Company hereby grants Licensee, and Licensee hereby accepts, the non- exclusive right, during the Term to: (i) develop, construct and open, and thereafter operate Restaurants that use the System only at locations in the Development Area that are accepted by Company, and (ii) use the Marks online, in and through mobile applications or other technology or media for purposes of online or virtual food-delivery of the food products produced by at Licensed Businesses (collectively, the “Development Right”).
(b) Effective upon Licensee’s opening of each Licensed Business, Company hereby grants Licensee, and Licensee hereby accepts, the non-exclusive right, license and obligation, to use and display the Marks, and to use the System, to operate that Restaurant during the Term, upon the terms and subject to the provisions of this Agreement (with respect to each such Restaurant, the “Restaurant License Right”). Notwithstanding the foregoing, no right or license is granted to Licensee to deliver, or permit the delivery of, any food, beverage or other product more than 4 miles from the premises of any Licensed Business.
(c) Licensee shall not sublicense, sublease, subcontract or enter any management agreement providing for the right to operate any Restaurants or to use the System.
2.2 No Territorial Rights; Reserved Rights.
(a) Licensee is not granted any territorial rights or protection herein.
(b) The license granted to Licensee under this Agreement is nonexclusive and Company expressly reserves all rights including, the exclusive, unrestricted right, in its discretion, directly and indirectly, itself and through its employees, Affiliates, representatives, franchisees, licensees, assigns, agents and others:
(i) to develop, own and/or operate businesses at any location, and of any type whatsoever (and whether or not using the System or any portion thereof), regardless of their proximity to the Restaurants developed hereunder, whether under the Marks or any other name or system;
(ii) to produce, license, distribute and market brand named products under the Marks or other trademarks, and products bearing other marks, including food and beverage products, , books, apparel, and retail items, at or through any location or outlet, including grocery stores, supermarkets and convenience stores at any location regardless of proximity to the Restaurants in the Development Area, and through any distribution channel, at wholesale or retail, including by means of delivery, the internet or internet web site, online platform, mobile application, mail order catalogs, direct mail advertising, delivery, catering and other distribution methods;
(iii) use, advertise and promote the System through any means; and
(iv) to develop or become associated with other concepts (including dual branding and/or franchise systems), and developer and operate and/or award franchises and/or licenses under other concepts for locations anywhere.
TERM AND RENEWAL
3.1 Term. The term of this Agreement ("Term”) commences on the Effective Date and shall expire 91 calendar days from the Effective Date, unless renewed or terminated earlier under the terms of this Agreement.
(a) Subject to the Licensee’s satisfaction of the conditions set forth in Section 3.2(b), Licensee may renew the Term for additional 91-day periods by continuing to subscribe to the Accelerator at the then current price (“Term Renewal Right”).
(b) Licensee’s Term Renewal Right is conditioned upon Licensee’s fulfillment of each of the following conditions precedent:
(i) At the time Licensee wishes to renew and at all times thereafter, Licensee shall have fully performed all of its obligations under this Agreement and all other agreements then in effect between Licensee and Company or its Affiliates;
(ii) Without limiting the generality of Section 3.2(b)(i), Licensee shall not have committed (whether or not cured) three (3) or more defaults of the Agreement during any 12 month period, for which Company shall have delivered notices of default, whether or not such defaults were cured; and
(iii) If requested in writing by Company, Licensee shall, and shall cause each of its Affiliates to, execute and deliver to Company a general release, on a form prescribed by Company of any and all known and unknown claims against Company and its Affiliates and their owners, officers, directors, agents, and employees.
(c) If Licensee fails to renew or to meet the conditions set forth in Section 3.2(b), then such failure shall be deemed an election by Licensee not to renew the applicable Term and shall automatically cause Licensee’s Term Renewal Right to lapse and expire, in which case Licensee must cease operating all Licensed Businesses and comply with the obligations set forth in Article 14 with respect to all Licensed Businesses.
3.3 Effect of Expiration. Unless the Term Renewal Right is properly exercised, following the expiration of the Agreement, (a) Licensee’s right to construct, equip, own, open or operate Restaurants shall cease, and (b) Company may thereafter itself construct, equip, open, own or operate, and grant licenses and development rights to others to construct, equip, open, own or operate Restaurants at any location(s)
3.4 Legal Requirements. If Applicable Law requires that Company give notice to Licensee prior to the expiration of the Term, then at Company’s option, the Term, shall remain in effect on a week to week basis until Company has given the required notice.
PAYMENTS BY LICENSEE
4.1 License Fee. Each subscription to the Accelerator includes a license to operate a delivery restaurant for each of the Marks from one location. For each additional location that Licensee operates, Licensee shall pay Company a supplementary license fee (the “Supplementary License Fee”) of $99 per month paid quarterly in advance.
4.2 Timing of Payments; Application of Payments. The initial payment shall be due on the Effective date, and all renewals and Supplementary License Fees shall be due on each quarterly anniversary of the Effective date or approximately every 91 days.
4.3 EFT and Pre-Authorized Payments. At Company’s request, Licensee shall instruct its bank to make all payments due under this Agreement directly to Company from Licensee’s account, by electronic funds transfer or such other automatic payment mechanism which Company may designate (“EFT”). Promptly upon Company’s request, Licensee shall execute and deliver to Company such pre-authorized check forms and other instruments or drafts required by Company’s bank to enable Company to draw all sums payable under the terms of this Agreement. Licensee shall also maintain such bank account(s) for such payments and shall maintain the minimum balance in such account(s) as Company may reasonably specify. Licensee shall not alter or close any such account without Company’s prior written approval.
4.4 Other Payments. Licensee shall pay to Company upon demand all taxes (such as sales, service, use or value added taxes) that may be imposed upon payments made by Licensee to Company, but in all events excluding Company’s ordinary income taxes. Licensee shall remain current and fully comply and perform each of its obligations to its landlords, vendors, and suppliers.
4.5 Interest and Charges for Late Payments. If Licensee fails to pay to Company all sums owed to Company promptly when due, Licensee shall pay interest on the unpaid amounts from the date due, at the lower of 18% per annum or the highest rate allowable under Applicable Law. If any check, draft or electronic transfer is unpaid because of insufficient funds or otherwise, then Licensee shall pay Company’s expenses arising from such non-payment, including bank fees in the amount of at least U.S. $50.00.
TRAINING AND ASSISTANCE
5.1 Initial Training Program. Company shall provide Licensee with a comprehensive digital training program covering the operations of virtual restaurants.
5.2 Massive Exposure Plan. Upon request from Licensee Company will provide a prominent listing on one or more websites and social media pages as deemed appropriate by company.
5.3 Marketing. Company shall provide Licensees as a group with a general marketing plan each month with advertising templates for social media use.
RESTAURANT SITES AND COMMENCEMENT OF BUSINESS
6.1 Site Acceptance and Development.
(a) Each of the Marks may be used for a single location unless a Supplementary License Fee has been paid.
(b) Licensee may not relocate a Restaurant without Company’s prior written consent.
(c) Licensee shall cause each Licensed Business to be equipped in accordance with the System and Standards.
6.2 Maintenance. Licensee shall cause each of the Licensed Businesses to be maintained in “like new” condition and operation. If in Company’s reasonable judgment, the state of repair, appearance, cleanliness or functionality of any of a Licensed Business (including the fixtures, equipment, or furnishings therein or used therein) fail to meet the Standards, Company shall provide written notice to Licensee and Licensee shall cause such deficiencies to be corrected within the time period(s) prescribed by Company.
6.3 Cooperation - Licensee shall provide Company with all information requested, and access and passwords as necessary to perform the agreed services including but not limited to access to Facebook, Instagram, Google My Business, third-party delivery platforms and other sites as Company may require.
STANDARDS OF OPERATION
7.1 Compliance with System and Applicable Law. Licensee shall cause each Licensed Business to be operated in strict compliance with the System, Standards and Applicable Law and in all cases operated as a clean, orderly, lawful and respectable place of business. Licensee shall refrain from engaging in action (or failing to take any action), which causes or could cause damage, harm or injury to the Marks and/or the System. All food, beverage and other products sold by a Licensed Business shall be of the highest quality, and the ingredients, composition, specifications, and preparation of such food products shall comply with the System and Standards where specified.
7.2 Product Lines and Service. Licensee shall cause all Licensed Businesses (including Licensed Businesses operated by Licensee) to serve only those Authorized Products as Company directs or otherwise permits in writing. Licensee shall not offer or serve any other products or services, except with Company’s written consent. All Authorized Products shall be sold and distributed under the specific name(s) designated by Company and shall be purchased, inventoried, stored, prepared and served strictly in accordance with the System and the Standards. All other products and services that are authorized for sale under the Marks shall be purchased, inventoried, stored, prepared and served strictly under standards and the recipes of Company and, subject to Company’s consent, recipes created jointly by Company and Licensee. Licensee shall add, delete, or update any Authorized Products to its menu or change the format of the menu according to the instructions contained in a notice from Company. Licensee shall not remove any Authorized Product from Licensee’s menu without Company’s written consent.
7.3 Packaging, Utensils, and Other Goods. All packaging, boxes, utensils, cups, glasses, paper products, condiments, and other articles used in connection with the Restaurants shall conform to the Standards, shall be imprinted with the Marks, if and as specified by Company. No items of packaging, boxes, utensils, cups, glasses, paper products, condiments, and other articles used in connection with the Licensed Restaurants shall be used: (i) by any Restaurant operated by Licensee unless expressly approved by Company.
7.4 Menus. Authorized Products and other products and services offered and sold under the Marks shall be marketed only by menu formats that have not been disapproved by Company.
7.5 Notification of Legal Proceedings; Crisis Management Events.
(a) Licensee shall notify Company in writing promptly (but in any event within 5 days) after Licensee receives notice of (i) any violation, report, fine, test result or the like from a Governmental Authority, or (ii) the commencement of any investigation, action, suit, or other proceeding, or the issuance of any order, writ, injunction, award, or other decree of any court, agency, or other Governmental Authority that pertains to any Restaurant, the Marks or the System, or that may adversely affect operation of a Restaurant or Licensee’s ability to meet its obligations. Licensee shall promptly send a copy of all relevant communications and documents to Company. Licensee shall cause all deficiencies to be corrected within the shorter of (i) 5 days or such fewer number of days as required by Applicable Law or a Governmental Authority, or (ii) immediately following knowledge of any deficiency that has created or threatens to create a material health or safety issue.
(b) Upon the occurrence of a Crisis Management Event, Licensee shall immediately inform Company by telephone and email (or other electronic messaging medium authorized by Company for this purpose). Licensee shall cooperate fully with Company in Company’s response to the Crisis Management Event. Company may require Licensee to, among other things, temporarily close the applicable Licensed Business. In such event, Company shall not be liable to Licensee for any losses or costs, including consequential damages or lost profits occasioned by such procedures or closure.
7.6 General Marketing Requirements; Digital Assets.
(a) Licensee may use and/or display any advertising or marketing materials that involve or use the Marks, System or Restaurants in accordance with the Standards, except if any such advertising or marketing materials are disapproved by Company. Any advertising or marketing materials or concepts created by Licensee not disapproved by Company are and will be the sole and exclusive property of Company. Company may, in its discretion, require Licensee to cease using any advertising or marketing materials. Upon written notice by Company, Licensee shall cease using all advertising or marketing materials that have been disapproved by Company.
(b) Licensee’s use of the Digital Assets, including the use of the passwords and usernames associated therewith, shall be subject to Company’s policies. All uses of the Digital Assets shall be in good taste, lawful and consistent with the image and standards of the Marks and System. Licensee shall not alter or change any username or password associated with any of the Digital Assets without Company’s prior written consent.
7.7 Insurance. Licensee shall obtain and maintain at all times during the Term insurance coverage in the types and the minimum amounts of coverage set forth on Exhibit A, which amounts are subject to increase upon written notice by Company. Each policy of insurance obtained by Licensee shall designate Company and its designated Affiliates as additional named insureds. All policies will be issued by a company or companies responsible, with a minimum A.M. Best’s rating of A-VII at policy inception, and authorized to do business in the jurisdiction in which the corresponding Restaurant is located. All policies shall include a waiver of any rights of subrogation that Licensee and its insurer(s) might otherwise have against Company and its Affiliates. Any deductibles or self-insured retentions in excess of U.S. $10,000 must be approved by Company, such approval not to be unreasonably withheld. In the event of damage to any Licensed Business, the proceeds of insurance shall be used to restore the applicable Restaurant to its original condition as soon as possible. Upon request, Licensee shall provide Company certificates of insurance naming Company and its designated Affiliates as additional named insureds as required hereunder. In addition, the certificates shall contain a provision requiring 30 days prior written notice to Company of any proposed cancellation, modification, or termination of insurance.
PURCHASE OF EQUIPMENT, SUPPLIES, AND OTHER PRODUCTS
8.1 Non-Proprietary Products. Company may recommend certain food products, condiments, merchandise, beverages, raw materials, fixtures, furnishings, equipment, supplies, paper goods, services, menus, packaging, forms, and other products, supplies, services and equipment, (“Non- Proprietary Products). Licensee may purchase Non-Proprietary Products from supplier of Licensee’s choice so long as Licensee purchases of are an equivalent standard and/or quality rating where specified. For example, where recipes require organic produce or a certain USDA grade of meat, Licensee must purchase the specified standard.
REPORTS, BOOKS AND RECORDS, INSPECTIONS
9.1 Reporting. Upon request and Licensee shall provide company with copies of all third-party delivery platform reports and/or online access to those reports.
9.2 Inspections. Company’s representatives shall have the right to enter upon the premises of any Licensed Business. If any inspection reveals a deficiency or unsatisfactory condition under this Agreement, the Standards or System, Licensee shall cause such deficiency or unsatisfactory condition to be corrected or repaired within the time period prescribed by the Company.
9.3 Books and Records. Licensee shall maintain an accounting and record keeping system, in accordance with sound business practices. Licensee shall maintain accurate, adequate and verifiable books and supporting documentation relating to such accounting information.
10.1 Use of Marks. Subject to Section 10.7, each Licensed Business shall be named in using the Marks in this license agreement with only such additional prefix or suffix as may be required or authorized by Company from time to time. Licensee shall use and display Company’s trade dress, Marks, and such signs, advertising and slogans only as Company may prescribe or approve. Upon expiration or sooner termination of the Term, Company may execute in Licensee’s name and on Licensee’s behalf, any and all documents necessary or appropriate to end and cause the discontinuance of Licensee’s use of the trade dress and Marks with respect to the Restaurants, and Company is hereby irrevocably appointed and designated as Licensee’s attorney-in-fact to do so. Licensee shall not use the Marks in connection with any assignment or offering of securities or any request for credit without the prior written approval of Company. Company may withhold or condition any approval related to the Marks. Licensee shall cause each Licensed Business to be identified as independently owned and operated under a license from Company, in the form and manner specified by Company, including on all invoices, order forms, receipts, checks, business cards, and otherwise as required by Company.
10.2 Non-Use of Trade Name. Licensee shall not use the Marks, or Company’s trade name, or any words or symbols which are confusingly similar, phonetically or visually, to the Marks, as all or part of Licensee’s name.
10.3 Use of Other Trademarks. Licensee shall not cause or permit the display of any the trademark, service mark, trade name, insignia or logotype of any other person or entity in connection with the operation of any Licensed Business without the express prior written consent of Company.
10.4 Non-ownership of Marks. Licensee acknowledges that Company intends to register Marks with the United States Patent and Trademark Office. Company can make no assurance that it will obtain any such registration or that an objection or claim may be raised regarding such registration application that would preclude a registration of such Mark in Company’s name or cause Company to abandon or change such Mark. Company, in its sole and absolute discretion, may abandon or modify such registration application and/or substitute a new application for any reason or no reason, and Licensee must use and adopt any such modified or substitute Mark. Company and its Affiliates shall have the sole right to register the Marks in the Development Area, and in all other geographic areas, and Licensee shall not register or attempt to register the Marks, or any name, mark or work which is similar to any of the Marks. Upon Company’s request, Licensee shall cooperate with and assist Company and its Affiliates to register the Marks in the name of Company or its Affiliates. Licensee agrees that Company’s trade dress and the Marks are the exclusive property of Company and/or its Affiliates and Licensee now, and will hereafter, assert no claim to any goodwill, reputation or ownership by virtue of Licensee’s licensed use, or otherwise. All use of the Marks and trade dress by Licensee inures to the benefit of Company. Licensee shall not contest or assist anyone in contesting at any time, in any manner, the validity of any Mark or its registration, and shall maintain the integrity of the Marks and prevent their dilution.
10.5 Defense of Marks. If Licensee receives notice, or is otherwise informed, of any claim, suit or demand against Licensee of any alleged infringement, unfair competition or similar matter on account of its authorized use of the Marks or trade dress, Licensee shall promptly notify Company. Company shall take such action, if any, as it may deem necessary and appropriate. Company shall have the sole right to defend, compromise or settle any claim, in its discretion, at Company’s sole cost and expense, using attorneys of its own choosing. Licensee acknowledges that Company may determine to cease using the Marks and require Licensee at their respective costs, to adopt substitute Mark(s). Licensee shall cooperate fully with Company in connection with the defense of any claim or any other proceeding. Licensee may participate at its own expense in such defense or settlement, but Company’s decisions with regard to the disposition of a claim shall be final.
10.6 Prosecution of Infringers. Licensee shall promptly notify Company if it receives notices or learns that any unauthorized third party is using Company’s trade dress or Marks or something similar. Company shall have absolute discretion to determine how, whether or in what manner to respond to such third party’s infringement.
10.7 Modification of Marks. Company may add to, delete, modify or substitute any or all of the Marks and trade dress. Licensee shall use, or cease using, the Marks and/or trade dress at its expense including any substitute, modified or additional trade names, trademarks, service marks, logotypes, commercial symbols, and trade dress under the Standards. Licensee shall implement any change within the time period specified by Company, or such shorter length of time prescribed pursuant to Applicable Law or order of Governmental Authority.
10.8 Assumed Name Registration. If required by Applicable Law, Licensee shall promptly upon the execution of this Agreement file with Governmental Authorities a notice of its intent to conduct its business under the Marks with only such additional prefix or suffix as may be required by Company. Promptly upon the expiration or termination of this Agreement Licensee shall execute and file such documents as may be necessary to revoke or terminate such assumed name registration, or any other registrations or filings, and if Licensee fails to promptly execute and file such documents, Licensee hereby irrevocably appoints Company as its attorney-in-fact to do so for and on behalf of Licensee.
TRADE SECRETS AND DEVELOPMENTS
11.1 Trade Secrets.
(a) Licensee acknowledges that Trade Secrets have commercial value and are not publicly available and that Company has taken measures to maintain its confidentiality; as such, the Trade Secrets are proprietary and trade secrets of Company. Licensee shall keep all Trade Secrets confidential and shall not disclose any Trade Secrets to any person except as necessary to operate Licensed Businesses in compliance with this Agreement.
(b) Licensee shall: (i) not use the Trade Secrets in any business or other endeavor other than in connection with Licensed Businesses; (ii) maintain absolute confidentiality of the Trade Secrets during and after the Term; and (iii) make no unauthorized copy of any portion of the Trade Secrets, confidential correspondence, or other confidential communications, whether written or oral. Licensee shall operate Licensed Businesses and implement all reasonable procedures prescribed by Company to prevent unauthorized use and disclosure of the Trade Secrets. If Licensee has any reason to believe that any employee has improperly used or disclosed Trade Secrets, Licensee shall promptly notify Company and shall cooperate with Company to protect Company against infringement or other unlawful use, including, the prosecution of any lawsuits.
(c) In view of the importance of the Marks and the Trade Secrets and the incalculable and irreparable harm that would result to the parties in the event of a default of the covenants and agreements set forth in this Agreement, the parties agree that each party shall have the right to obtain provisional or precautionary measures, including specific performance, temporary restraining orders and temporary or preliminary injunctive relief from a court of competent jurisdiction to enforce the covenants and agreements in this Agreement, in addition to any other relief to which such party may be entitled at law or in equity. Each party submits to the exclusive jurisdiction of the courts of the State of California and the U.S. Federal courts sitting in Los Angeles, California for these purposes. The parties agree that venue for those proceedings shall be in the State and Federal courts located in Los Angeles, California. Licensee agrees that Company may obtain provisional or precautionary measures, including temporary or preliminary injunctive relief without bond, but upon due notice, and Licensee’s sole remedy in the event of the entry of such injunctive relief will be the dissolution of the injunctive relief, if warranted, upon hearing duly had.
11.2 Confidentiality and Press Releases. Unless required by Applicable Law, no public communication, press release or announcement regarding this Agreement, the transactions contemplated hereby or the operation of the Restaurants or any Crisis Management Event shall be made by Licensee without the prior written approval of Company.
11.3 Effect of Applicable Law. In the event any portion of the covenants in this Article violates laws affecting Licensee, or is held invalid or unenforceable in a final judgment to which Company and Licensee are parties, then the maximum legally allowable restriction permitted by law shall control and bind Licensee. Company may at any time unilaterally reduce the scope of any part of the above covenants, and Licensee shall comply with any such reduced covenant upon receipt of written notice.
12.1 Assignment by Company. Company may at any time assign, transfer, or delegate any or all of its rights and obligations under this Agreement without Licensee’s consent. Company shall be permitted to perform these actions without liability or obligation to Licensee who expressly and specifically waives any claims, demands or damages arising from or related to any or all of the above or similar actions. Company shall have no liability for the performance of any obligations contained in this Agreement after the effective date of a transfer or assignment provided that the assignee or transferee assumes all of Company’s obligations hereunder.
12.2 Assignment by Licensee.
(a) This Agreement has been entered into by Company in reliance upon and in consideration of the singular personal or collective characteristics, reputation, skill, business ability, and financial capacity of Licensee, or if applicable, its owners who will actively and substantially participate in the development ownership and operation of the Restaurants. Accordingly, except as otherwise may be permitted by this Agreement, Licensee shall not, cause or permit any Assignment without Company’s prior written consent. Any purported Assignment occurring by operation of law or otherwise without Company’s prior written consent shall constitute a material default of this Agreement, and shall be null and void.
(b) Licensee shall not, directly or indirectly, pledge, encumber, hypothecate or otherwise grant any third party a security interest in this Agreement in any manner whatsoever without the prior written consent of Company. To the extent that the foregoing prohibition may be ineffective under Applicable Law, Licensee shall provide not less than 10 days prior written notice containing the name and address of the secured party and the terms of the pledge, encumbrance, hypothecation or security interest in this Agreement.
DEFAULT AND TERMINATION
13.1 Termination of Development Right, Agreement, Restaurant License Right or Sublicense Right. Subject to Applicable Law, the Development Right, this Agreement, any or all Restaurant License Rights at the option of the Company, may be terminated by Company in the event of any breach or default of any term or condition of this Agreement (including a failure to comply with the System or Standards), unless such default or breach is cured by Licensee within 5 days following written notice of the default or breach in the case of a failure to pay money, or 60 days following written notice of the default or breach in the case of any other default or breach; provided that any default or breach described in Section 13.2 shall be deemed incurable.
13.2 Incurable Defaults. The following defaults shall be deemed incurable, authorizing Company, at its sole option, to terminate the Development Right, this Agreement, any or all Restaurant License Rights, without notice, and without any opportunity to cure by Licensee:
(a) Licensee or any Licensed Business has been the subject of an order for relief in bankruptcy, judicially determined to be insolvent, all or a substantial part of the assets thereof are assigned to or for the benefit of any creditor, or Licensee admits its inability to pay its debts as they come due;
(b) Licensee abandons a Licensed Business operated by it by failing to operate the Licensed Business for five consecutive days during which Licensee is required to operate the Licensed Business, or any shorter period after which it is not unreasonable under the facts and circumstances for Company to conclude that Licensee does not intend to continue to operate the Licensed Business, unless such failure to operate is due to fire, flood, earthquake, or other similar causes beyond the Licensee’s control;
(c) Licensee makes any material misrepresentations relating to the acquisition of this Agreement.
(d) Licensee engages in conduct which reflects materially and unfavorably upon the operation and reputation of the Marks, business or System;
(e) Licensee fails for a period of 10 days after notification of noncompliance, to comply with any federal, state, or local law or regulation, including, but not limited to, all health, safety, building, and labor laws or regulations applicable to the operation of a Licensed Business;
(f) Licensee, after curing any failure engages in the same noncompliance whether or not such noncompliance is corrected after notice;
(g) Licensee repeatedly fails to comply with one or more requirements of this Agreement, whether or not corrected after notice;
(h) Licensee or any Licensed Business are seized, taken over, or foreclosed by a government official in the exercise of his or her duties, or seized, taken over, or foreclosed by a creditor, lienholder, or lessor, provided that a final judgment against Licensee remains unsatisfied for 30 days (unless a supersedeas or other appeal bond has been filed); or a levy of execution has been made upon the license granted by this Agreement or upon any property used by Licensee in any Restaurant, and it is not discharged within five days of such levy;
(i) Licensee or any principal Owner is convicted of a felony or any other criminal misconduct which is relevant to the operation of a Licensed Business; or
(j) Company makes a reasonable determination that continued operation of a Licensed Business will result in an imminent danger to public health or safety.
(k) Licensee fails to maintain a minimum customer rating on all third-party delivery platforms of no less than 60% of the relevant scale (for example 3 stars out of 5) over a 60-day period.
13.3 Remedies Non-Exclusive. Company’s exercise of any remedies provided in this Agreement shall be non-exclusive, and Company’s exercise of any right to terminate or rescind less than all of the rights granted to Licensee by this Agreement (including without limitation the termination or rescission of less than all of the rights granted or licensed herein) shall not preclude or limit any subsequent exercise of Company’s right to terminate all or part of the remaining rights granted to Licensee.
13.4 Notice Required By Law. Notwithstanding anything to the contrary contained in this Article, in the event Applicable Law limits Company’s rights of termination or requires longer notice periods than those set forth above, this Agreement shall be deemed amended to conform to the minimum notice periods or restrictions upon termination required by Applicable Law. Company shall not, however, be precluded from contesting the validity, enforceability or application of such laws or regulations in any action, hearing or dispute relating to this Agreement or its termination.
13.5 Right To Withhold Services/Obligations While In Default. If Licensee commits any act or omission that would give rise to Company’s right to terminate, then Company is permitted to, instead of or in addition to terminating, withhold, postpone, or forgo any services, payments, access to any electronic systems or other materials or programs, or any other obligations imposed on Company by this Agreement, until Licensee has cured its violation or has otherwise remedied the default to Company’s satisfaction. For the sake of clarity, Company’s rights under this Section include the right to require Licensee to pay for products or services on a cash-in- advance or cash-on-delivery basis.
13.6 Termination by Licensee for Cause. If Licensee follows the steps in the Accelerator and does not see any results, then Licensee may terminate this Agreement for cause. Prior to any termination for cause, Licensee shall provide Company with the following records showing: (1) Licensee created a new Virtual Restaurant and operated it for at least 60 days. (2) Restaurant was open a minimum of 6 days per week, for at least 6 hours a day, on at least one third-party delivery platform (3) Licensee spent a minimum of $200 marketing Restaurant during the 60-day period. (4) Licensee followed the menu costing and pricing guidelines in the Accelerator (5) Restaurant sales totals from all outlets. (6) Any additional records reasonably requested by Company relating to the claim from Licensee. If Licensee demonstrates cause then Company, at its sole discretion, shall have the option to either (a) refund the current quarters subscription or (b) extend the Term for 91 days at no additional charge. Any refunds will be for one quarter only and one-time only. If the Term is extended and Licensee still wishes to terminate at the end of the new Term then no further compensation will be due to License and the termination will be considered without cause and be governed by section 13.7 If Licensee wishes to continue after the refunded Term, the regular subscription must be paid in full. If Licensee terminates this Agreement pursuant to this Section and a refund is issued, Licensee shall comply with all of the terms and conditions of Article 14. An arbitrator shall have no power to modify, change, amend, or waive this Section.
13.7 Termination by Licensee Without Cause – Licensee may terminate this Agreement without penalty up to 3 working days before renewal in any Term. Licensee will have access to the Accelerator and all Marks until the end of the then current Term and no further subscription charges will be made. In the event of cancellation or Termination, no pro rata or other refunds of subscriptions will be made for the remaining portion of any Term. If Licensee terminates this Agreement pursuant to this Section, Licensee shall comply with all of the terms and conditions of Article 14. An arbitrator shall have no power to modify, change, amend, or waive this Section.
RIGHTS AND OBLIGATIONS UPON TERMINATION
14.1 General. Upon the expiration or termination of the applicable rights granted to Licensee under this Agreement:
(a) Licensee shall, at its own cost, follow all of Company’s requirements regarding the de-identification of the applicable Licensed Business(s) as may be directed by Company and the transfer to Company of any uses of the Marks in mobile applications or other technology or media for purposes of online or virtual food-delivery.
(b) Licensee as applicable, shall cease using the Marks, the System, Standards and Trade Secrets to the extent required by Company relating to the termination.
(c) Licensee shall immediately pay any and all amounts owing to Company and
(d) Any and all obligations of Company to Licensee under this Agreement as to the rights terminated shall immediately cease and terminate.
(e) Any and all rights of Licensee under this Agreement shall immediately cease and terminate as to the rights terminated.
(f) Licensee shall transfer and assign to Company or its designee all telephone numbers, and all other listings for the applicable Restaurants, authorize and instruct their transfer to Company. If requested by Company, Licensee shall be obligated to grant to Company’s attorneys in fact the necessary and sufficient power(s) of attorney for the aforementioned purposes.
(g) The termination of the Agreement will not relieve Licensee of liability for any damages or loss that Company sustains as a result the applicable breach or default.
(h) Licensee shall not operate a delivery-only restaurant using substantially the same menu or recipes as TWO HENS, nor claim any association between any new delivery-only restaurant and TWO HENS or any of the Marks.
CERTAIN REPRESENTATIONS AND WARRANTIES OF LICENSEE
15.1 Certain Representations. Licensee represents and warrants to Company as follows:
(a) Company has not represented that Licensee will earn, is likely to earn, or can earn an amount in excess of the initial payment paid by Licensee to Company in connection with this Agreement.
(b) Company has not represented that there is a market for the any of the products or services marketed by Licensee.
(c) That neither Company nor or one or more Designated Persons (as defined below), will:
(i) provide locations for the use or operation of equipment, displays, vending machines, or similar devices, owned, leased, controlled, or paid for by Licensee; or
(ii) provide outlets, accounts, or customers, including, but not limited to, Internet outlets, accounts, or customers, for Licensee’s goods or services; or
(iii) buy back any or all of the goods or services that Licensee makes, produces, fabricates, grows, breeds, modifies, or provides, including but not limited to providing payment for such services.
15.2 Reliance. Licensee acknowledges that Company is entering into this Agreement in reliance the foregoing representations and warranties and that Company would not have entered into this Agreement had such representations and warranties not been made or had Company known or had reason to believe such representations and warranties were incomplete or untrue.
RELATIONSHIP OF PARTIES, INDEMNITY
16.1 Relationship of Licensee to Company. It is expressly agreed that the parties intend by this Agreement to establish between Company and Licensee the relationship of licensee and licensor. It is further agreed that Licensee has no authority to create or assume in Company’s name or on behalf of Company, any obligation, express or implied, or to act or purport to act as agent or representative on behalf of Company for any purpose whatsoever. Neither Company nor Licensee is the employer, employee, agent, fiduciary, partner or co-venturer of or with the other, each being independent. Licensee agrees that it shall not under any circumstances hold itself out as the agent, representative, employee, partner or co-venturer of Company. All employees hired by or working for Licensee shall be the employees of Licensee and shall not, for any purpose, be deemed employees of Company. Each party shall file its own tax, regulatory and payroll reports for its respective employees and operations, saving and indemnifying the other party from any liability of any nature whatsoever.
16.2 Indemnity. Licensee shall protect, defend and indemnify Company, and all of its past, present and future Owners, Affiliates, officers, directors, employees, attorneys and designees, and each of them, and hold them harmless from and against any and all costs and expenses, including attorneys’ fees, court costs, losses, liabilities, damages, claims and demands of every kind or nature on account of any actual or alleged loss, injury or damage to any person or Entity or to any property arising out of or in connection with (i) any breach or default by Licensee of this Agreement; or (ii) Licensee’s development, construction (including any latent or patent defects), maintenance or operation of any Restaurant. Company shall give Licensee written notice of any claim for which the notifying party demands indemnity; provided that such obligation shall not constitute a condition to these indemnification obligations unless the indemnifying party has been materially prejudiced by such delay. Company shall retain the right and power to direct, manage, control and settle the litigation of any claim. Any payments made by an indemnified party shall be net of benefits received by any indemnified party on account of insurance in respect of such claims.
GENERAL CONDITIONS AND PROVISIONS
17.1 Waiver and Delay. No waiver by either party of any default, and no failure, refusal or neglect of a party to exercise any right, power or option under this or any other agreement between Company and Licensee, shall constitute a waiver of the provisions of this Agreement for any continuing or subsequent default or a waiver of the right at any time thereafter to require exact and strict compliance.
17.2 Survival of Covenants. The covenants and agreements contained in this Agreement which, by their nature or terms, require performance or forbearance by the parties after the expiration or termination of this Agreement shall be enforceable notwithstanding the expiration or other termination of this Agreement.
17.3 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of Company and shall be binding upon and inure to the benefit of Licensee, subject to the prohibitions and restrictions against Assignment contained in this Agreement. This Agreement is for the benefit of the parties only, and, except as expressly provided in this Agreement, is not intended to and shall not confer any rights or benefits upon any person who is not a party to this Agreement.
17.4 Governing Law. Except to the extent governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Section 1051 et seq.), this Agreement, and any dispute that may arises under or as a result of this Agreement, will be governed by the laws of the State of California; provided, however, that any California statute or law governing the purchase and sale or franchises, or the relationships between franchisor and franchisee shall not apply unless such statutes or laws would otherwise apply absent this choice of law provision. Each party expressly waives any other Applicable Law derived from the current or future domiciles of the parties or for any other reason whatsoever. The foregoing shall not affect the arbitration provision set forth in Article 18.
17.5 Entire Agreement; Amendments. This Agreement contains all the terms and conditions agreed upon by the parties with reference to the subject matter of this Agreement. No other agreements concerning the subject matter of this Agreement, oral or otherwise, shall be deemed to exist or to bind any of the parties. All prior or contemporaneous agreements, understandings and representations relating to the subject matter of this Agreement are merged and are expressly superseded by this Agreement, except any representations made by Licensee in acquisition of this Agreement. No officer or employee or agent of Company has any authority to make any representation or promise not included in this Agreement, and Licensee agrees that it has executed this Agreement without reliance upon any such representation or promise. Except as provided in Section 6.1(a), this Agreement cannot be amended, modified or changed except by written instrument signed by both parties.
17.6 Titles for Convenience. Article and paragraph titles used this Agreement are for convenience only and shall not be deemed to affect the meaning or construction of any of the terms, provisions, or conditions of this Agreement.
17.7 Gender and Construction. The terms of all Exhibits hereto are hereby incorporated into and made a part of this Agreement as if the same had been set forth in full herein, as the same may be modified by Company from time to time. All terms used in any one number or gender shall extend to mean and include any other number and gender as the facts, context, or sense of this Agreement or any article or Section hereof may require. When a reference is made in this Agreement to an Article, Section or Exhibit, such reference shall be to an Article, Section or Exhibit to this Agreement, unless otherwise indicated. As used in this Agreement, the words “include,” “includes” or “including” are used in a non-exclusive sense. Unless otherwise expressly provided herein to the contrary, any consent, acceptance, approval or authorization of Company which Licensee may be required to obtain hereunder may be given or withheld by Company in its sole discretion, and on any occasion where Company is required or permitted hereunder to make any judgment, determination or use its discretion, including any decision as to whether any condition or circumstance meets Standards, Company may do so in its sole subjective judgment and discretion. No provision herein expressly identifying any particular breach of this Agreement as material shall be construed to imply that any other breach which is not so identified is not material. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against the drafter hereof, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of all parties hereto. Company and Licensee intend that if any provision of this Agreement is susceptible to two or more constructions, one of which would render the provision enforceable and the other or others of which would render the provision unenforceable, then the provision shall be given the meaning that renders it enforceable.
17.8 Severability. If any part, article, paragraph, sentence or clause of this Agreement shall be held to be indefinite, invalid or otherwise unenforceable, the indefinite, invalid or unenforceable provision shall be deemed deleted, and the remainder of this Agreement shall continue in full force and effect.
17.9 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. This Agreement may be executed electronically.
17.10 Fees and Expenses. If any party to this Agreement shall bring any action or proceeding for any relief against the other, arising out of this Agreement, the losing party shall pay to the prevailing party a reasonable sum for attorney fees and costs incurred in bringing or defending such action or proceeding and shall be paid whether or not such action or proceedings is prosecuted to final judgment.
17.11 Notices. Except as otherwise expressly provided in this Agreement, all written notices and reports permitted or required to be delivered by the parties shall be deemed so delivered at the time delivered by hand, or by reputable overnight courier.
(a) Except as otherwise provided in this Agreement, and except as precluded by Applicable Law, any dispute, controversy or claim between Company and Licensee arising out of or relating to this Agreement or any alleged default under this Agreement, including any issues pertaining to the arbitrability of such dispute, controversy or claim and any claim that this Agreement or any part of this Agreement is invalid, illegal, or otherwise voidable or void, shall be submitted to binding arbitration administered by ADR Services, Inc. (“ADR”) under the appropriate commercial ADR rules and procedures of mediation then in effect, by one arbitrator selected under the applicable rules. The arbitrator shall issue his or her arbitral award within sixty (60) days of the arbitration hearing. The substantially prevailing party shall be entitled to recover all of its fees and costs, including its attorneys’ fees, and all costs of arbitration, including the fees of the arbitrator. Judgment upon any award rendered may be entered in any court having jurisdiction. The proceedings shall be held in Los Angeles, California. In no event may the material provisions of this Agreement, or any ancillary agreement executed in connection with this Agreement, including, the method of operation, authorized product line sold or monetary obligations specified in this Agreement, amendments to this Agreement be waived, modified or changed by the arbitrator at any arbitration hearing. The substantive law applied in such arbitration shall be as provided in Section 17.4. The arbitration and the parties’ agreement to arbitrate shall be deemed to be self-executing, and if either party fails to appear at any properly-noticed arbitration proceeding, an award may be entered against such party despite said failure to appear. Failure by either party to pay the fees (or provide a required deposit) of the arbitrator and/or the arbitration administrator under the rules and policies of the applicable Entity shall result in a forfeiture by the non-paying party of the right to prosecute or defend the claim which is the subject of the arbitration, but shall not otherwise serve to abate, stay or suspend the arbitration proceedings. The arbitral decision shall be binding and conclusive on the parties. A judgment confirming the award may be given by any court having jurisdiction, or that court may vacate, modify, or correct the award under the prevailing provisions of the California statute governing arbitration.
18.2 Provisional Relief - Nothing in this Article 18 shall prejudice the right of any party to obtain provisional relief or other equitable remedies from a court of competent jurisdiction as shall otherwise be available under the Applicable Law.
18.3 Waiver of Jury Trial; Venue. TO THE EXTENT PERMITTED BY APPLICABLE LAW THE PARTIES: (1) HEREBY WAIVE THEIR RIGHT TO JURY TRIAL WITH RESPECT TO ALL CLAIMS AND ISSUES ARISING UNDER, IN CONNECTION WITH, TOUCHING UPON OR RELATING TO THIS AGREEMENT, INCLUDING ANY BREACH AND/OR THE SCOPE OF THE PROVISIONS OF THIS Article 18, WHETHER SOUNDING IN CONTRACT OR TORT, AND INCLUDING ANY CLAIM FOR FRAUDULENT INDUCEMENT, AND (2) AGREE THAT LOS ANGELES, CALIFORNIA SHALL BE THE VENUE FOR ANY LITIGATION ARISING UNDER THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THEY HAVE REVIEWED THIS SECTION AND HAVE HAD THE OPPORTUNITY TO SEEK INDEPENDENT LEGAL ADVICE AS TO ITS MEANING AND EFFECT.
By subscribing and agreeing to the terms and conditions of the Accelerator the parties have caused this Agreement to be executed as of the Effective Date.
Set forth below are the types and minimum coverage amounts that we currently require for each Restaurant location:
COMMERCIAL GENERAL LIABILITY:
Bodily Injured and Property Damage: U.S. $1,000,000 per occurrence combined general; U.S. $2,000,000 combined aggregate.
Personal Injury and Advertising Injury: U.S. $1,000,000 any one person or organization.
Products/Completed Operations: U.S. $2,000,000 annual aggregate.
Damages to Premises Rented: U.S. $100,000 any one premises Water and Liquid
Damage Legal Liability: U.S. $1,000,000 any one occurrence.
Food Borne Illness U.S. $1,000,000 any one occurrence.
Goods, fixtures, furniture, equipment, and other personal property located at the premises of a Restaurant - 100% of their full replacement cost. Insurance to include coverage for loss of income and extra expenses, for the actual loss incurred, and include coverage for Licensee’s obligations to Company and its Affiliates
Workers Compensation: STATUTORY
Employer's Liability: U.S. $1,000,000 per employee, bodily injury by disease.
U.S. $1,000,000 policy limit, bodily injury by disease.
U.S. $1,000,000 per employee, bodily injury by accident.
Social Security As required by Applicable Law
Licensee acknowledges that these are minimum requirements; Company does not represent that these coverages will be sufficient to cover all losses. Licensee is advised to seek counsel and use its own judgment as to coverages appropriate to Licensee’s situation.